A system and method for processing refund requests in a postage system is described. In one configuration, each mail piece includes a tracking code. The refund system monitors the tracking codes as mail pieces are processed in the mail stream. A user enters a refund request for a particular mail piece that is identified by a unique tracking code. The refund system then interrogates a tracking code database to determine if the mail piece was observed in the mail stream. The system then continues to periodically interrogate the tracking code database over a test period of a week to determine if the mail piece was observed in the mail stream. If the mail piece is not observed within the test period, a refund is processed. The system continues to interrogate the tracking code database for a year after the refund is processed to ensure that fraud is not committed.